Sunny Meadows is reevaluating the pricing of its fresh-squeezed orange juice in half-gallon containers. Variable costs...
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Accounting
Sunny Meadows is reevaluating the pricing of its fresh-squeezed orange juice in half-gallon containers. Variable costs per container are $1.60. Based on market analysis, management has set a price range of $2.60 to $3.10. Identify the price that maximizes contribution margin and prepare a detailed income statement.
Price per Half Gallon
Estimated Demand (Half-Gallon Units)
$2.60
97,000
$2.65
94,000
$2.70
91,000
$2.75
88,000
$2.80
85,000
$2.85
82,000
$2.90
79,000
$2.95
76,000
$3.00
73,000
$3.05
70,000
$3.10
67,000
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